Government Giveth...

By Tom Shoop

October 1, 2013

In early September, as what turned out to be a rather hectic summer drew to a close, my family managed to squeeze in a mini-vacation to Virginia Beach, Va. On the last day of the trip, we took a two-hour cruise on the nearby Elizabeth River and Hampton Roads Harbor that focused on pointing out the highlights of Naval Station Norfolk, the world’s largest Navy base.

Seated behind us on the boat was a local resident, entertaining out-of-town visitors. It soon became clear he was no fan of the federal establishment, as evidenced by the aphorisms he shared. “A government big enough to give you everything you want is a government big enough to take from you everything you have,” he declared at one point. “Do you know who said that? Davy Crockett.”

The historical record for Crockett having uttered these words is actually pretty thin. And the quote is often misattributed to Thomas Jefferson, too. But Gerald Ford definitely used the phrase in a 1974 address to Congress. The funny thing is, as our tour mate touted the virtues of small government, our vessel chugged past Navy destroyers, Coast Guard cutters, a National Oceanic and Atmospheric Administration facility, and cargo ships operated by the Transportation Department’s Maritime Administration. As this scene unfolded, he repeatedly noted the wide variety of projects he had worked on as a contractor for several of these operations. Associated businesses also had used his services.

In Norfolk, regardless of one’s political philosophy, big government is big business. And that is what has made this year—and potentially, the next several years—such a struggle for residents of the city and the surrounding Hampton Roads area.

In our cover story this month, Kellie Lunney explores the impact of sequestration and an overall shrinking of government spending on communities outside the Washington area. Having grown dependent on Uncle Sam for economic viability, these areas are looking for new ways to weather what could be less of a one-time jolt and more of a long, drawn-out process of cutting back the federal footprint.

Sequestration has not unfolded according to the doomsday predictions floated earlier this year. First, Congress carved out a series of exceptions to what was designed as a meat-cleaver approach to across-the-board budget slashing. Then, creative financial management by agencies also blunted some of the near-term effects of cuts.

But that doesn’t mean there were no effects. Thousands of federal employees were forced to take furlough days, and for some that led to genuinely painful choices about how to scale back their personal spending. And this could be just the beginning. After all, the government’s long-term fiscal picture still looks bleak. That’s leading communities like Hampton Roads to seek alternatives to reduce their dependence on federal money—particularly military spending. Local officials’ first choice is to attract a wider variety of private industries. But they’ll also settle for luring new and different kinds of government agencies and operations to their areas.

In the end, it will be a big struggle for many cities that have developed based on steady increases in federal spending to diversify their economies. The fact is, even in areas like Hampton Roads, government doesn’t give everyone everything they want. But it does provide an opportunity for a lot of people to build businesses and feed their families. If Uncle Sam now has the power to take all of that away—or even a good chunk of it, over several years—Washington isn’t the only city that is going to suffer.